Washington, D.C. – In response to the news that the Alabama Legislature unanimously passed the Community Pharmacy Relief Act (SB252), which – pending Governor Kay Ivey’s signature – will require pharmacy benefit managers (PBMs) to reimburse independent pharmacies according to their acquisition and labor costs, the American Economic Liberties Project released the following statement.

“The status quo PBM reimbursement system pays pharmacies seemingly random amounts for prescriptions, similar to playing the slots in Las Vegas – sometimes you win, but you usually lose,” said Benjamin Jolley, PharmD, Senior Fellow for Healthcare at the American Economic Liberties Project. “SB252 enforces a cost-based reimbursement system that pays pharmacies as the service providers they are, rather than the gambling addicts they are not. Doing so will end the uncertain, unfair, and below-cost payments that are the cause of the pharmacy desert crisis in Alabama and across the country.”

PBMs are middlemen who negotiate prescription drug benefits on behalf of health plans with drug manufacturers and pharmacies. The “Big Three” PBMs – CVS Caremark, Cigna Group’s Express Scripts, and UnitedHealth Group’s OptumRx – control nearly 80% of U.S. prescription drug claims. They leverage this market power to demand untenably low reimbursement rates from independent pharmacies in exchange for inclusion in their networks. Many pharmacies accept these rates for fear of losing access to a large share of their customer base. But these rates are accelerating the pharmacy closure epidemic. Economic Liberties research shows that at least 79 Alabama pharmacies closed between January 2024 and February 2025. Alabama pharmacists staged a walkout in February to protest PBMs’ role in these closures.

SB252 prohibits PBMs from reimbursing independent pharmacies less than the amount paid by Medicaid, steering patients to their affiliated pharmacies, and using spread pricing, among other provisions.

The Big Three PBMs also use their market power – combined with a rebate-driven business model that biases PBMs toward higher list price drugs, as Economic Liberties detailed in a February 2023 policy brief – to mark up drug prices by as much as 7,736%, according to the Federal Trade Commission.

Learn more about Economic Liberties’ Break Up Big Medicine initiative to address healthcare consolidation here.

Learn more about Economic Liberties here. 

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.